I'm a Fellow at the Adam Smith Institute in London, a writer here and there on this and that and strangely, one of the global experts on the metal scandium, one of the rare earths. An odd thing to be but someone does have to be such and in this flavour of our universe I am. I have written for The Times, Daily Telegraph, Express, Independent, City AM, Wall Street Journal, Philadelphia Inquirer and online for the ASI, IEA, Social Affairs Unit, Spectator, The Guardian, The Register and Techcentralstation. I've also ghosted pieces for several UK politicians in many of the UK papers, including the Daily Sport.

The Apple Boycott: People Are Spouting Nonsense about Chinese Manufacturing

It would appear that there’s momentum being gained for the idea of boycotting Apple‘s products over conditions in the company’s manufacturing chain in China. This is a very silly idea and there is much nonsense being spouted about those conditions.

Apple, the computer giant whose sleek products have become a mainstay of modern life, is dealing with a public relations disaster and the threat of calls for a boycott of its iPhones and iPads.

The company’s public image took a dive after revelations about working conditions in the factories of some of its network of Chinese suppliers. The allegations, reported at length in the New York Times, build on previous concerns about abuses at firms that Apple uses to make its bestselling computers and phones. Now the dreaded word “boycott” has started to appear in media coverage of its activities.

“Should consumers boycott Apple?” asked a column in the Los Angeles Times as it recounted details of the bad PR fallout.

Two of the New York Times articles are here and here. Dan Lyons weighs in here.

Essentially, the list of charges is that the near 1 million people who work for Foxconn (about 230,000 of whom produce products for Apple, the others assembling for Dell, HP, just about every electronics company in fact) have to work long hours for low pay in dangerous conditions.

Well, yes, they’re poor people living in a poor country. That’s what being poor means, having to work extremely hard to make very little. Yes, that is a harsh thing to say but then reality can indeed be harsh.

To show that it’s not just uncaring neoliberals like myself who say such things why not try reading Paul Krugman on the subject of sweatshops? Specifically, here, on what would happen if we were to try and stop the manufacturing being done in such poor places:

First of all, even if we could assure the workers in Third World export industries of higher wages and better working conditions, this would do nothing for the peasants, day laborers, scavengers, and so on who make up the bulk of these countries’ populations. At best, forcing developing countries to adhere to our labor standards would create a privileged labor aristocracy, leaving the poor majority no better off. And it might not even do that. The advantages of established First World industries are still formidable. The only reason developing countries have been able to compete with those industries is their ability to offer employers cheap labor. Deny them that ability, and you might well deny them the prospect of continuing industrial growth, even reverse the growth that has been achieved. And since export-oriented growth, for all its injustice, has been a huge boon for the workers in those nations, anything that curtails that growth is very much against their interests. A policy of good jobs in principle, but no jobs in practice, might assuage our consciences, but it is no favor to its alleged beneficiaries.

And a very important point, again from Professor Krugman, about what determines the wages that are paid:

Wages are determined in a national labor market: The basic Ricardian model envisages a single factor, labor, which can move freely between industries. When one tries to talk about trade with laymen, however, one at least sometimes realizes that they do not think about things that way at all. They think about steelworkers, textile workers, and so on; there is no such thing as a national labor market. It does not occur to them that the wages earned in one industry are largely determined by the wages similar workers are earning in other industries. This has several consequences. First, unless it is carefully explained, the standard demonstration of the gains from trade in a Ricardian model — workers can earn more by moving into the industries in which you have a comparative advantage — simply fails to register with lay intellectuals. Their picture is of aircraft workers gaining and textile workers losing, and the idea that it is useful even for the sake of argument to imagine that workers can move from one industry to the other is foreign to them. Second, the link between productivity and wages is thoroughly misunderstood. Non-economists typically think that wages should reflect productivity at the level of the individual company. So if Xerox manages to increase its productivity 20 percent, it should raise the wages it pays by the same amount; if overall manufacturing productivity has risen 30 percent, the real wages of manufacturing workers should have risen 30 percent, even if service productivity has been stagnant; if this doesn’t happen, it is a sign that something has gone wrong. In other words, my criticism of Michael Lind would baffle many non-economists.

Associated with this problem is the misunderstanding of what international trade should do to wage rates. It is a fact that some Bangladeshi apparel factories manage to achieve labor productivity close to half those of comparable installations in the United States, although overall Bangladeshi manufacturing productivity is probably only about 5 percent of the US level. Non-economists find it extremely disturbing and puzzling that wages in those productive factories are only 10 percent of US standards.

Finally, and most importantly, it is not obvious to non-economists that wages are endogenous. Someone like Goldsmith looks at Vietnam and asks, “what would happen if people who work for such low wages manage to achieve Western productivity?” The economist’s answer is, “if they achieve Western productivity, they will be paid Western wages” — as has in fact happened in Japan. But to the non-economist this conclusion is neither natural nor plausible. (And he is likely to offer those Bangladeshi factories as a counterexample, missing the distinction between factory-level and national-level productivity).

I quote at such length because it is an extremely important point. Wages paid to manufacturing workers in China are not determined by the productivity of those specific workers. They are not determined by US wages, by the profits that Apple makes nor even by the good intentions of the creative types that purchase Apple products. They are determined by the wages paid by other jobs in China and that is itself determined by the average level of productivity across the Chinese economy.

But now to the specific complaints that are being made. There are three that are being repeated around the intertubes as being particularly outrageous.

The first is the spate of suicides at the Foxconn plants. Suicides did indeed take place and each and every one an individual tragedy. Both for those who died and for those they left behind to mourn them. However, we are talking about some 18 suicides in 2010. What we actually want to know is whether that is a high or a low number. Suicide does happen in every society and country, so before we start blaming working conditions we’d like to know whether that rate is higher or lower than that in the surrounding society.

The general suicide rate in China is 22 per 100,000 people. That is a high rate by international standards but that is the one that we should be looking at to try and judge the suicide rate at Foxconn.

Foxconn employs some 1 million people in total so, if the Foxconn workforce were to have the same suicide rate as the general Chinese population (which, to be accurate, it won’t for suicide is not equally divided over age groups and the workforce is predominantly young) we would expect to see 220 suicides among such a number each year.

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The only underage workers found at Foxconn plants, albeit only a handful, where in fact carrying forged documents so that they could get jobs.

Try reading his article again as you obviously didn’t, or lack the mental capacity to truly understand it – these workers are not slaves, they make a better than prevailing wage, save money on their own as well as send money home to support their extended families who are in poverty. China is still a country of over 800 million peasant farmers and these workers are actually improving their lives and are happy to have these jobs. This is not the definition of slavery.

16 hour days 6 and 7 day weeks, 24 in a single room for 31 cents an hour and you dont consider that slavery? NO! YOU READ THE ARTICLE AGAIN SIR! I HAVE READ 50 ARTICLES ON THIS FROM “CREDIBLE” NEWS SOURCES AND NOT SOME RANT BY SOME OVERPAID FAT FINANCIAL ADVISER! Dont tell me about this is “improving” their lives you insensitive, sociopathic apologist! My god, where do you get these fantasies! Telling us about the rest of the starving population doesn’t excuse for a second the inhumane and barbaric treatment. Only an a backwards American could placate themselves with the knowledge a starving person is happy not to starve so they “enjoy slavery” ! You disgust me.

freerange, This response makes me think you work for the central Communist governments mis-information branch. They frequently leave posts on sites like these to throw the sent off their trail and never enter into a logical discussion, just insults and conjecture. No experience.

You really need to get back on your meds. Meanwhile, it might be a good idea to actually travel to China to see what is really going on for yourself rather than reading articles by people who have no clue about China in its entirety – about it’s people, culture, history and current economic conditions – rather than relying on limited anecdotal stories that lack balance and perspective.

As an American living and teaching in China, I applaud Tim Worstall for this well thought out piece on the reality of labor in China. Many of the comments posted above to this piece are based on two things – ignorance and arrogance. Ignorance of what goes on in the rest of the world, and how people in developing companies live and get ahead. Classic American arrogance in that we know better than anyone else what is good for people living outside our own country. It is shameful that there is such a lack of understanding of what makes the whole world work and is indicative of some of the moronic positions in the political debates of the day. Unfortunately most American have not had the opportunity to work in our own factories so have no clue what it is like to work in a production environment. To earn money for college I worked STANDING ALL DAY at a Ford engine plant where we MANDATORY 7 day work weeks as they built inventory for a new model year – I had 2 days off an entire summer only because I called in sick one day, and they didn’t make us work on the 4th of July. I also worked two years in the Cleveland steel plants standing on top of coke plant ovens breathing toxic gases and other pollutants. The tops of the ovens were outside so even in the summer’s beating sun I had to wear thermal underwear to insulate from the heat, and wooden clogs on the bottom of my work boots to keep from burning the bottoms of my feet. I had to carefully watch which way the wind was blowing when I pulled the lids off the ovens to be sure that it was blowing to my back so that the toxic gasses would be blowing away from me when they ignited hitting the oxygenated outside air. I wore a screen shield over my face just in case they blew back at me to proven serious burns. But guess what – I was more than happy to have those jobs because I was able to save money and improve my life, exactly what Chinese workers are doing, in far better conditions than I worked in. Get over yourselves.

You are a liar freerange and worked as an adult, not a child, in an American plant protected by unions that paid you overtime for the two months you worked by choice! You lived in a place that wasn’t a room with 24 other people in, you had you family and privacy and weren’t under the threat of being imprisoned for 12 years fo even discussing a union. Where if you complained you were beaten The idea that you would attempt to justify this with you made up stories of faux suffering is revolting! YOU HAD A SUMMER JOB YOU WENT TO MAKE MONEY IN CONDITIONS THAT WERE 100X BETTER THAN THESE WORKERS! THIS IS THEIR LIVES!

Classic American arrogance and ignorance is what you represent , not the people with a disgust for slavery. Stay in China with the other slave masters working for Foxconn. I’ve worked in other countries and your kind always tries to rationalize inequality and slavery and is a disgusting part of the American psyche

Do not worry about darlieb. FREERANGE is either a Chinese or most probably, a memeber of the taskforce paid by the Chinese government to follow and blog on important websites. Such post are than published in China as translation of US Media articles !!!

freerange,, This response makes me think you work for the central Communist governments mis-information branch. They frequently leave posts on sites like these to throw the sent off their trail and never enter into a logical discussion, just insults and conjecture. No experience.